Slower paced market, slower price rise
There’s been more than enough talk about the impending crash of Canadian real estate, but without some major outside economic shock, we aren’t expecting a catastrophic fall in 2018. What we will see is a reduction in volume to fewer than 100,000 unit sold province-wide, which will equate to a drop from 2017, but still above the ten-year average. Inventory constraints, higher mortgage qualifying requirements, rate volatility, and constrained economic growth are expected to drag prices lower nationally, but for Victoria we are still expecting modest single-digit price growth over the coming year.
Year of the Condo
Condo prices made huge gains in 2017. Because condos offer more accessible price points, and the appeal of a lower-maintenance lifestyle, we expect demand to remain high in 2018, with the resultant upward pressure on condo prices. Case in point: we had our last condo listing of 2017 under contract within a week, and it sold for over asking. Interested in capitalizing on the condo trend? Give us a call!
With a scarcity of developable land, and cranes dotting the downtown #YYJ skyline, it’s clear to see that developers are working to meet demand, and we are excited to see what some of the larger, master-planned communities such as Bayview and Dockside Green will have to offer residents as they continue to build out, reimagining the area west of the bridge with a new urban vibrancy.
Mortgage Rate Movement
With two rate hikes in 2017, the Bank of Canada finally began to shift away from the previous seven year cycle of historically low rates. This doesn’t necessarily mean that rates will make a straight shot up in the year ahead, as lenders typically cut their fixed rates to compete for business in the spring, and often push them up later in the year, closer to year-end. By and large, consumers should expect a little more rate volatility than has been the norm over the past few years.
Multi-family development taking centre stage
As alluded to above, the cost of financing and the cost of land are contributing to a reduction in the number of detached housing starts, as well, rising sale prices for attached homes and condo units have developers looking to multi-family property types to create new housing stock. With plenty of new townhouse and condo product coming up in Greater Victoria, watch for this trend to continue in 2018.
Return of the 30 year Mortgage
With the prospect of a one-two punch to consumers in the form of the higher stress test threshold and increasing rates, buyers will be seeking means to stay in the game. 30-year amortizations are still available to borrowers who have more than 20% down, and although the longer term incurs CMHC fees, it will likely be the difference in approval for many individuals, applying both to new mortgages and to those reaching the end of their terms and shopping for options at renewal.
Cutting-edge tech is nothing new in the real estate business, but as we here at YYJhome.ca position ourselves for this year and further into the future, we can see that the rise in mobility amongst our clientele - consumers’ need to have good information accessible anywhere as they navigate the property market - will dictate that we continue to provide faster, easier access to information on the go. Our interpretation, analysis, and contextualization of market data will be key to helping you maximize your opportunities. In addition, we anticipate leaning into our commitment to utilizing technology to showcase our property listings - particularly in the 3D virtual tour / VR space, a sector in the real estate industry we are expecting to see grow rapidly over the next decade.
How Will these Trends Affect YOU?
Want to talk to a well-regarded local real estate expert about how these trends - and others - may affect your particular situation? Send Dirk an email now and get the conversation started.